About the Lawcards Series

Employment Lawcards Glossary

Click on the glossary term to see the definition

Chapter 1

Employee

This is a term referring to a person who workers under a 'contract OF service' (it is defined in Employment Rights Act 1996 (ERA 1996) s 230) It applies to a person who agrees to perform work personally and they are subject to greater regulation by the employer than is applicable to an independent contractor. However, employees also have greater protection to employment rights than any other status of worker.

Employment Tribunal

The specialist forum for determining employment disputes. They hear complaints between the employer and worker on topics ranging from dismissals and redundancy to minimum wage claims and discrimination issues.

Express Term

These are terms expressed in words or writing that outline the parties' obligations. Typically in contracts of employment this will include pay; the details of hours; any restrictive covenant in the contract and so on.

Garden Leave

This is a more secure way of ensuring an employee does not leave the employment and work in competition against the employer. It incorporates a long period of notice and, whilst more expensive than a restraint of trade clause, it is more effective and more readily enforced by the courts (through injunctions).

Implied Term

These are of particular importance to contracts of employment as many significant obligations are included in implied terms, which, by their nature, are not spoken or written. They place obligations on the employer and employee, and one of the most important implied terms for both parties is that of mutual trust and confidence.

Independent Contractor

This is a term referring to a person who works under a 'contract FOR services.' Independent contractors have less access to employment rights (such as unfair dismissal and redundancy) although they benefit from being able to work for different employers; they have access to more favourable tax regulations; are not subject to the same level of implied terms and so on.

Mutual Trust and Confidence

One of the most important implied terms imposed on both the employer and employee. This requires the parties to treat each other with respect and not to take actions likely to destroy the working relationship.

Mutuality of Obligations

This is a key term for identifying 'employee' status. It requires an on-going relationship between the parties whereby the employee makes themselves available for work and the employer has a mutual obligation to provide work or pay.

Restraint of Trade Clause

A contractual clause that enables the employer to restrict an employee, having left their employment, from competing with the employer for a specific duration and a specific geographical / industrial area. It is incumbent on the employer to demonstrate the need to protect their 'legitimate proprietary interests' and that the clause is both reasonable between the parties and public policy. The courts require the employer to convince them of the necessity of the clause.

Worker

A term increasingly used to grant specific employment rights to 'workers' rather than the restrictive term 'employee.' It has been applied to rights including the Working Time Regulations 1998; the National Minimum Wage Act 1998; and the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000.

Written Particulars

ERA 1996 s 1 outlines the information that an employee is entitled to receive within 8 weeks of commencing the employment. This includes information such as the parties' names and contact addresses; the responsibilities at work, holiday pay; notice periods and so on.

Chapter 2

Comparator

To claim under the sex and race discrimination laws the claimant has to compare themselves with another person (of the opposite sex) who is, for example, receiving higher pay under the Equal Pay Act 1970 (EPA 1970). In the EPA 1970 there has to be an actual comparator working for the employer, but under the Sex Discrimination Act 1975 and Race Relations Act 1976, a hypothetical comparator may be used.

Direct Effect

Legislation from the EC creates rights for individuals in the Member States that domestic courts must apply even in the absence of any national implementing legislation. The European Court of Justice had developed tests to establish if the relevant law has Direct Effect.

Dispute Resolution

As opposed to the traditional, adversarial, court-based mechanism to resolve disputes, alternative methods have been recommended through legislation and the courts. This has led to the statutory discipline / grievance procedures and an increasing reference to arbitration and conciliation through organisations such as ACAS.

European Community

The European Community (EC) is the international treaty that the United Kingdom joined in 1973. It has had significant implications for employment law (introducing the Working Time Regulations 1998; the protections for part-time workers; those on fixed-term contracts; and the discrimination laws - amongst many other initiatives). It also has led to several changes to domestic legislation through the rulings of the European Court of Justice. To understand employment law you must understand EC law.

Genuine Material Factor / Defence

An employer may demonstrate that unequal pay between men and women, which appears to demonstrate discrimination, is however for some other reason than sex. Equal pay is only applicable between men and women based on their sex, so if the employer can demonstrate that the difference in pay is due to, for example, market forces (Strathclyde Regional Council v Wallace (1998)) then this will nullify a claim. The reason must, however, be justified.

Heads of Claim

In order for a claim under the EPA 1970 to be made, the claimant must choose one of the 'heads' of claim - like work; work rated as equivalent; and work of equal value on which to base their action.

Pay

The term 'pay' has been widened following judgments from the European Court of Justice to include wages, and other benefits such as holiday pay, employer's contributions to the worker's pension; company car provisions; health benefits and so on. It now includes all contractual benefits.

Red-Circle

Where an employer has conducted a job evaluation scheme and under a regarding an employee or group of employees have been moved to a lower grade, this mechanism allows the employer to protect and maintain the affected employees' salary (Snoxell v Vauxhall Motors Ltd (1977)).

Chapter 3

Direct Discrimination

Direct discrimination cannot be justified by an employer, regardless of how 'pure' are their motives. It involves the claimant being treated less favourably on the basis of their sex, race or disability. This occurs before and during employment (such as at the advertisement and interview stages in employment).

Disability Discrimination

This is governed by the Disability Discrimination Act 1995 (as amended) and requires employers to make reasonable adjustments to prevent discrimination against their employees who are subject to a disability.

Genuine Occupational Qualifications

An available defence to a claim of sex or race discrimination where the requirements of the role necessitates one sex, or member of a race, than another.

Indirect Discrimination

Indirect discrimination can be justified by an employer. It involves conduct or practices that, on the surface, appear to be neutral but work in practice to be discriminatory to members of a particular sex or race. In terms of sex discrimination, there must be a provision, criterion or practice that puts the claimant at a particular disadvantage, and which the employer cannot demonstrate is proportionate to achieving a legitimate aim.

Race Discrimination

This is governed by the Race Relations Act 1976 (RRA 1976) which is essentially a copy of the Sex Discrimination Act 1975 (SDA 1975) (albeit in terms of discrimination based on race rather than sex). The claimant must demonstrate they were subjected to discrimination based on their race (either direct or indirect) and suffered a detriment as a result.

Sex Discrimination

This is governed by the SDA 1975 and prohibits discrimination (direct or indirect) and victimisation of the worker. It is applicable to both men and women, although the claim must consist of discrimination based on the claimant's sex.

Sexual Harassment

SDA 1975 s 4A defines harassment as engaging in unwanted verbal, non-verbal and physical conduct, of a sexual nature that adversely affects the claimant's dignity or creates a hostile, humiliating or offensive environment.

Vicarious Liability

The perpetrator of acts of discrimination, including harassment, will be held liable for their actions. It will also lead to the employer being held liable unless they can show that they took reasonable steps to prevent its occurrence. Vicarious liability requires that the worker has 'employee' status, and that the discriminatory act(s) occurred during the 'course of employment.'

Victimisation

This occurs where a person has claimed, intended to claim, or assisted a colleague with a claim under the discrimination laws, and they have suffered victimisation by the employer (such as treating them less favourably than they would treat others). SDA 1975 s 4 and RRA 1976 s 2 make such actions unlawful.

Chapter 4

Common Law

The common law governs wrongful dismissal, whereas unfair dismissal is governed by statute. The 'standard' rules of contract law apply to questions of the contract of employment.

Constructive Dismissal

An employer may fundamentally breach the contract of employment, but not dismiss the employee (an essential requirement for qualification to claim unfair dismissal). On the event of the breach, the employee may accept this repudiation, inform the employer of their reason for leaving, follow the necessary grievance procedure, and claim constructive dismissal (essentially an unfair dismissal claim).

Facts discovered after the dismissal

The employer need only have reasonable grounds of suspicion of an employeeÕs gross misconduct / negligence to have reason to dismiss. Between the dismissal and the case being heard at the tribunal the employer may have obtained firm evidence to support their previous suspicions. These are considered Ôafter discovered reasonsÕ and cannot make an unfair reason to dismiss fair, but will reduce the compensation awarded. Conversely, these reasons may be used in a wrongful dismissal claim to make an otherwise wrongful dismissal a fair dismissal.

Fixed-Term Contract

Contracts of employment may have a fixed duration. At common law a non-renewal will not amount to a dismissal, whereas under unfair dismissal legislation, non-renewal will amount to a dismissal, but this can be justified by the employer.

Frustration

Where the contract of employment becomes radically different from that agreed; or it subsequently becomes impossible to perform (and this is the fault of neither party) then the contract is brought to an end with no fault being attributed. An example of frustration may be where the employee becomes permanently ill and cannot continue with their job.

Gross Misconduct

This is a serious act of misconduct that would justify a summary dismissal such as fighting, theft and so on.

Gross Negligence

This is a serious act of negligence on the part of the worker that will justify a summary dismissal.

Resignation

This is where the worker provides notice of their intention to leave the employment. The requirement is that the worker adheres to the terms of the contract with regards to the notice period.

Specific Performance

An equitable remedy compelling compliance with the contract. This will not be awarded in contracts involving personal service (such as contracts of employment).

Summary Dismissal

This is a dismissal without notice (an immediate dismissal). The common law requires a notice period to be complied with unless the worker has committed a fundamental breach of the contract.

Wrongful Dismissal

A dismissal in breach of the contract will be considered a wrongful dismissal and will enable the worker to bring an action in damages for any losses incurred as a result of the breach.

Chapter 5

Automatically Unfair Reasons to Dismiss

Legislation including the Employment Rights Act 1996 (ERA 1996), Trade Union and Labour Relations (Consolidation) Act 1992, Rehabilitation of Offenders Act 1974, and Transfer of Undertakings (Protection of Employment) Regulations 2006 identify dismissals that will be considered 'automatically' unfair. As such, the requirement for one year's continuous service is not required. Examples include dismissals due to pregnancy, being a member of a trade union and so on.

Band of Reasonable Responses

When a tribunal considers whether an employer's response of dismissal is reasonable and fair they will follow the Employment Appeal Tribunal's judgment in Iceland Frozen Foods v Jones (1982) considering the employer's investigation; what was a reasonable band of responses; and whether the employer's action fell into this band.

Compensation

The compensatory element to an unfair dismissal claim involves a basic award, the compensatory award, and the additional award (where appropriate). Maximum awards (currently £60,600) exist to the tribunal's assessment of damages.

Disciplinary Procedures

Following the Employment Act 2002 the employer must follow the statutory dismissal procedures or the dismissal will be held, automatically, to be unfair. The three stages involve a letter informing the employee of the issue under dispute; a meeting; and the possibility of an appeal if the employee is dissatisfied with the outcome.

Effective Date of Termination

As a claim under unfair dismissal has to be lodged at the tribunal within three months of the effective date of termination (EDT) (and in redundancy claims it is six months), it is important that the EDT is correctly established. The ERA 1996 ss 97 and 145 identify how to determine from when the date takes effect.

Potentially Fair Reasons to Dismiss

ERA 1996 s 98 identifies six potentially fair reasons for an employer to dismiss an employee. These are conduct; capability / qualifications; redundancy; contravention of a statute; some other substantial reason; and retirement.

Re-engagement

If the previous job cannot be offered to the employee who has won an unfair dismissal claim (under reinstatement) because of, for example, redundancies, the tribunal can award re-engagement. This requires that the employee is given a job with the employer that is as close as possible to the role unfairly dismissed from in terms of seniority, pay, responsibility and so on.

Reinstatement

This is an award available to the tribunal following a finding of unfair dismissal. The employee will be asked if they wish to be reinstated to their previous position unless the option is untenable. The employer has no choice in the decision to make this award but can refuse. If so, the additional award reflects the employer's unreasonable refusal to comply.

Unfair Dismissal

The ERA 1996 provides that an employee who satisfies the qualification criteria may bring an action against the employer for reinstatement, re-engagement and compensation if they have been unfairly dismissed.

Chapter 6

Bumping

Where an employeeÕs job continues whilst there is a reduction elsewhere in the organization for the same number of persons to carry out the work.

Consultation

In the event of any planned redundancies or a transfer of the undertaking Trade Union and Labour Relations (Consolidation) Act 1992 and Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE 2006) require the employer to consult with the employees or their representatives. They must also consult over the reason for any redundancies being planned / made (UK Coal Mining Ltd v NUM (2007)).

Economic, Technical or Organisation Reason

Unilateral variation of an employee's contract is not permissible when there is a transfer of the undertaking under TUPE 2006. However, the law provides for an exception to this prohibition if there is an economic, technical or organisational (ETO) reason for the transfer. This further enables dismissals to be made on the transfer (which would otherwise be automatically unfair) for an ETO reason, but if the employer cannot establish an effective ETO defence, the dismissal will enable a redundancy claim (Gorictree Ltd v Jenkinson (1984)).

Redundancy

This is governed by the Employment Rights Act 1996 and includes situations where the employer is closing their business or where the employee becomes surplus to the business needs of the employer.

Reorganisation of the Business

An employer may wish to reorganise their business in light of changing needs; competition and so on. The law allows them to do so and even if there are substantial changes to the employee's terms and conditions of employment (such as changing the way the job is performed), if the job function remains the same then there will have been no redundancy (and hence no claim allowable from the employee). If the job itself has changed, then a redundancy claim may be made.

Transferee

The buyer (and new employer) who inherits the staff upon a transfer subject to TUPE.

Transferor

The seller (and former employer) from whom the staff are transferred in a transfer subject to TUPE.

Chapter 7

Economic Tort

Trade unions and those involved in actions against the employer (such as pickets) have been subject to prosecutions through the courts for instigating losses to businesses. Examples of economic torts applied against trade unions include inducement to breach contract; interference with contract; intimidation and so on.

Golden Formula

This is the 'formula' required to prevent trade unions or those involved in industrial action from being subject to legal action such as the tort of interference with contract. The protection exists where the person is acting 'in contemplation or furtherance of a trade dispute.'

Industrial Action

This is an all-encompassing term to refer to action by a workforce that is designed to interfere with an employers business. It includes action by workers including strikes; picketing; work-to-rule policies; overtime bans; and so on.

Injunction

This is a court order requiring or preventing an action. It can be used to prevent strike action that would adversely affect the employer's business.

Picketing

A picket is (generally) a non-violent protest at or near the employer's business which is designed to obtain support by dissuading others from crossing the picket line and hence to more effectively disrupt the business.

Private Nuisance

Some industrial action, such as picketing, may constitute a private nuisance that enables the affected party to claim for damages in tort against the tortfeasor. This may occur when picketing takes place on the employer's premises; when it blocks access routes to the employer's property; when the actions of the pickets exceed the bounds of peacefully obtaining or communicating information and so on.

Public Nuisance

When the behaviour of those taking part in industrial action obstructs the public in the exercise of their rights (such as passage along the highway), a claim may be made under public nuisance. Also, if certain criteria are met, an individual who suffers special damage over and above that suffered by the rest of the public may also make a claim.

Strike

This is a concerted action by the workforce to produce a stoppage in work. It requires ballots of members and for the action to be taken in 'good faith' to prevent legal action against the trade union organising the action.